Method of issuance. Upon obtaining authorization from the Commission, utilities may issue securities by either a competitive bid or negotiated placement, provided that:

Competitive bids are obtained from at least two prospective dealers, purchasers or underwriters; or

Negotiated offers are obtained from at least three prospective dealers, purchasers or underwriters; and

The utility:

Accepts the bid or offer that provides the utility with the lowest cost of money for securities with fixed or variable interest or dividend rates, or

Accepts the bid or offer that provides the utility with the greatest net proceeds for securities with no specified interest or dividend rates, or

The utility has filed for and obtained authorization from the Commission to accept bids or offers other than those specified in paragraphs (a)(3)(i) or (a)(3)(ii) of this section.

Exemptions. The provisions of paragraph (a) of this section do not apply where:

The securities are to be issued to existing holders of securities on a pro rata basis;

The utility receives an unsolicited offer to purchase the securities;

The securities have a maturity of one year or less; or

The securities are to be issued in support of or to guarantee securities issued by governmental or quasi-governmental bodies for the benefit of the utility.

Prohibitions. No securities will be placed with any person who:

Has performed any service or accepted any fee or compensation with respect to the proposed issuance of securities prior to submission of bids or entry into negotiations for placement of such securities; or

Would be in violation of section 305(a) of the Federal Power Act with respect to the issuance.